Gateway shuts down in Australia

Computer giant Gateway will immediately close operations in Australia, New Zealand, Malaysia, Singapore and Japan as it axes a quarter of its 24,600 global staff.

In a dramatic worldwide retreat, Gateway said it would also decide within 30 days whether to withdraw from Europe as it focuses instead on slimmed-down US operations in the face of falling sales.

Gateway lost $US9 million ($17.03 million) in the second quarter of this year as the slumping computer market sent sales plunging to $US1.5 billion from $US2.207 billion (down to $2.84 billion from $4.18 billion) a year earlier.

The sweeping restructure will reduce US staff ranks by 15 per cent and the global work force by 25 per cent.

"As tough as these decisions were to make, we are doing all the right things to create a new company with a uniquecompetitive edge and a healthy, profitable future," said Gateway chairman and chief executive Ted Waitt in a statement.

"As a result, the company announced it will immediately close all of its company-owned operations in Malaysia, Singapore,Japan, Australia and New Zealand.

"The company is currently engaged in the employee consultation process in key European markets regarding a proposal toexit those markets as well," the statement said.

The restructuring would likely lead to a one-off charge of about $US475 million ($898.77 million) in the third quarter ofthis year, including $150 million in cash, it said.

But a $US300 million ($567.64 million) in costs and expenses would be saved every year, Gateway forecast.

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Sandra Van Dijk

Computerworld
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